Human Rights for Workers Bulletin

Vol. II, No. 9: June 11, 1997 

Corporate Codes Don't Cure Misconduct in China


Codes of conduct may be highly overrated as techniques to eliminate sweatshops, at least in the People's Republic of China. That conclusion flows from a new study of shoe and toy factories in China by the Hong Kong Christian Industrial Committee, a non-governmental monitoring group.

Both the toy and shoe industries are major engines of China's recent economic growth. Both industries are covered by codes of conduct--toys by a code of the International Council of the Toy Industry and shoes by various company codes, including that of Reebok. The committee's finding: despite the codes, the conditions of the industries' working men and women have not improved, and may even be worsening.

The committee's research methodology differs from that of most inspections done for the corporations involved. Instead of just visiting a plant under a management-conducted tour and relying on information provided by management, the committee's researchers conduct interviews with workers off the job, and examine documentation provided by workers, such as pay slips.

Researchers from the Hong Kong committee have surveyed the labor practices of the shoe and toy industries in southeastern China for more than two years. In recent updates conducted in booming Guangdong province, the committee found the following serious abuses common in both industries:

These and other abuses have been repeatedly exposed in the Hong Kong and foreign media over the years, and yet remarkably similar practices continue. Back in 1988, for example, Business Week reported that a Kader toy factory in Guangdong was requiring its women workers to work 14 hours a day, seven days a week. Of late, to fill rush orders, Kader workers were pressed into frequently working 20-hour days over a two-month period.

Ideological Crisis in Chinese Society

In its newsletter, Change, the Hong Kong Christian Industrial Committee provides the social context for these abuses:

"The collapse of the socialist system and lip service to freedom of assembly, association, speech, and press in the Chinese constitution have created an ideological crisis in [China's] society. In addition to the corruption prevalent among government officials, laws have been used only as a weapon of restriction of people's freedom, rather than a protection of people's freedom, rather than protection of people's rights. Law is a piece of paper to workers. It is the same [with] codes of conduct of multinational corporations. They are merely empty words."

Those highlights are from the latest Change newsletter, whose theme is "The Implementation of the Codes of Conduct in China." Among other things, it compares the Reebok Human Rights Production Standards, adopted in 1990, with the practices of a chain of KTP shoe factories, which are major Reebok suppliers, and finds that the practices sharply violate key standards.

To get on the mailing list of "Change," write to the Hong Kong Christian Industrial Committee, 3/F, 57 Peking Road, Kowloon, Hong Kong. No subscription price, but I suggest a minimum donation of $25. To start your subscription immediately, with the issue on codes of conduct in China, send a fax to 852-2724-5098 or email the CIC at

MFN Hurts Both China's and U.S. Workers: AFL-CIO

Barbara Shailor, director of the international affairs department of the AFL-CIO, on June 10 told a U.S. Senate committee why the AFL-CIO opposes extending China's Most-Favored Nation (MFN) trade privileges with the United States. Here are brief excerpts from her testimony before the Senate Finance Committee, which has jurisdiction over trade matters.
The U.S. government has extended MFN trading privileges to China every year for the last 17 years, and has nothing to show for it....

The issue of greatest concern to the AFL-CIO is the Chinese government's repression of free and independent labor unions. Attempting to organize a union independent of the Communist Party is a crime. Worker activists whose only crime was to promote a discussion of labor rights under China's legal framework have been sentenced to the Laogai, China's system of forced labor camps. Labor union organizers (or those who write or speak about such a possibility) actually face longer sentences than students or intellectuals....

While a large majority of all foreign or mixed enterprises have union representation, in fact most of these unions serve to control workers, not to represent them. Australian academic Anita Chan has reported, for example, in the Minhang district of Shanghai, 67% of union leaders are on the managerial staff of companies, and 20% are Communist Party officials. Many "organized" workers are not even aware of the existence of a union in their own factories. U.S. investors implicitly endorse this charade by their silence....

U.S. policy toward China makes American consumers its unwitting accomplices. When Americans go shopping, they shouldn't have to support the repressive Chinese military apparatus, buy goods produced in forced labor camps, or subsidize the profits of companies that treat their workers disgracefully....

China's policy of extorting technology transfers and investment from American companies interested in selling in China is costing the United States good jobs in [for example] the aircraft and automotive sectors today. More serious, transferring technology--much of which has been subsidized by American taxpayers--will impose much greater costs 10 and 20 years from now, as American companies give away their technological advantage for short-term market access....

The AFL-CIO supports trade expansion, international engagement, and equitable development. But the Chinese government is not engaging in free trade, and we help neither the Chinese people in their aspirations nor our own work force by ignoring this basic fact.

Attached to Shailor's prepared testimony was a table with data supporting her point that "for all the talk about the jobs supported by U.S. exports to China, nine out of the top ten export surplus categories last year were raw materials and intermediate goods: fertilizers, cotton, cereals, wood pulp, rawhides, etc."

Don't Ignore Worker Rights: Harvard Economist

Though he classifies himself as a mainstream economist, Harvard University Professor Dani Rodrik differs from almost all his colleagues on a key point: he believes that international trade policy should give some kind of recognition to worker rights.

In his new book, Has Globalization Gone Too Far?, he writes: "The notion of fairness in trade is not as vacuous as many economists think." Consequently, he defends the right of nations "to restrict trade when it conflicts with widely held norms." This restriction, he says, could cover "imports from a country whose labor practices [such as child labor] broad segments of the domestic population deem offensive."

Failure to take those norms into account, he warns, undermines popular support for free trade and is generating a protectionist backlash, as we reported in a recent Bulletin (see Globalization's Ills.) But somehow I omitted the significant points quoted above. If the Washington Post had committed that kind of error, I would have written the editors a letter protesting the astigmatism of its journalists. Which reminds me that I did recently write the Post a letter about its reporting.

An Invidious Comparison by Washington Post

On June 5 I emailed the following self-explanatory letter to the Washington Post. Based on my past experience, the Post will probably not print it, but even if it does, not everyone who accesses this Web site reads the editorial pages of the Post.
As I child, I once heard my father, a German-speaking immigrant, speak about Nazi Germany's antisemitism. "Yes, Hitler has killed the Jews," he said, "but Americans killed the Indians." It was my first exposure to fallacious and invidious international comparisons, but not my last.

The latest came in the June 3 Post article by Paul Blustein, "Prison Labor: Can U.S. Point Finger at China?" Oddly enough, the hook for the article was testimony completely ignored at the time by the Post--exhaustive evidence about China's prison labor presented at hearings held May 21 and 22 in the U.S. Senate and House. Two weeks later, the long feature article in the Post's business section pooh-poohed that evidence.

The Blustein article simplistically equates the U.S. prison system with China's because persons behind bars in both countries perform work. After all, says the subhead, "American Inmates Manufacture Products." The article illustrates the naivete of both the Post and the credentialed experts that it quotes.

James Feinerman, a law professor at Georgetown, says it is "the height of hypocrisy for us to get on our high horse about China making prisoners work, given the fact that we do the same with our system." Incredibly, he even asks, "Who are we to argue with [China's] choices?" The Post quotes Harry Wu, who does argue with China's choices, but the basic assumption of the article is that a moral equivalency exists between the Communist Party's prison system and America's.

Hmmm. Let's test that assumption. Let's imagine that a teen-age student in Los Angeles wrote an article in his high school newspaper sharply criticizing President Clinton. "Clinton is a fool," he writes. Soon thereafter the Secret Service breaks into the student's house in the middle of the night, pulls him out of bed, and without a word of explanation to his parents hauls him away. Then, without access to a lawyer, without a trial, the student is locked up for three years in a forced labor camp where he, along with other "dissidents," as well as common criminals, are forced to work long hours making shoes. After three years, the student has failed to be "reeducated"--he still thinks that Clinton is a fool. So, again without a trial, he is sent to another forced labor camp that specializes in making dolls.

Wouldn't happen in the U.S., but that's the typical fate of anyone who dares commit the crime of criticizing the leadership of the Chinese Communist Party. The fear of harsh punishment helps keep the people muzzled and docile.

In the United States, even a few such cases would create a scandal. Outraged public opinion would inhibit well credentialed experts from pointing out that "political" detainees form only a small part of the prison population of the United States and that the shoes and dolls they produce for the market form only a tiny part of the U.S. gross national product. But why do U.S. experts routinely get away with making such absurd comparisons when it comes to China?

In his most recent testimony to Congress, Harry Wu once again revealed the horrors of China's prison system and its role as "the Chinese communist dictatorship's primary tool for crushing its citizens." He also gave detailed evidence of the complicity of U.S. companies in buying products made by China's prisoners. Such international trafficking violates U.S. law and the rules of the World Trade Organization, but if you hold the beliefs expounded in Blustein's article, why should the Washington Post or a Georgetown law professor point a finger? After all, China's prison system works, and works well: it keeps China's people in subjection.

Robert A. Senser
Editor, Human Rights for Workers
(Send e-mail)

 Bulletin No. II-9: June 11, 1997


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